Daily Market Analysis 21st January,2015

With a little more than a week left to end the first trading month of the year, things are not looking too positive for the stock markets. The forecast is usually taken from January each year to paint a picture on what the year ahead will pretty much look like. Based on January’s stock market performance this historical data will be a reflection on the rest of the year. The one measure of this intensified apprehension will be that of the Hulbert Nasdaq Newsletter Sentiment Index, or HNNSI. This will come from the average recommended equity exposure among a subset of Nasdaq oriented, market timers tracked by the Hulbert Financial Digest. The Nasdaq responds fast to consumer mood, this is why analysts use this stock (Nasdaq) as a barometer to measure and base the annual predictions on its outcome.

Monetary policy expansions were the driving force behind the foreign exchange markets yesterday. Traders’ operations yesterday were to sell the Yen (JPY), euro (EUR), Canadian dollars (CAD) and purchased the greenback (USD) just prior to the European Central Banks meeting tomorrow.

The USD had ended up trading at its highest yesterday against most of the majors. That includes the Yen (JPY), euro (EUR), and Canadian dollar (CAD). I am certain that the USD is going to continue to grow throughout this week. The joy of the greenback’s (USD) grown may slightly decrease by early next week – however I see it staying strong during the beginning of February 2015.

The sad state of the Euro drifted to an 11-year low which was reached last week as investors frantically sold the 19-nation currency on the expectation that the European Central Bank will authorize purchases of sovereign bonds after its meeting, which is due tomorrow. The EURO does not seem to me to be making a huge comeback anytime this month.

It is clear now that Brent Crude has picked up where it had left off last week, in a continuous drop that has paved the way for this commodity. Slightly picking up on Friday however, this victory was short lived. I project for February, that crude will not gain much momentum.

Gold has continued to yield in a seven day success. Markets closed yesterday with Gold being at its highest price, measured in the past five months. Still a safe-haven against currencies as the Central Bank’s meeting is looming in the near distance.

Today’s Trading Tip:

Go with a PUT on most majors against the USD, e.g.: JPY/USD, EURO/USD and / or CAD/USD. PUT the majors and CALL the green back, if the pro’s are doing it why not follow in their success?